Which of the following is a discrete random variable?
a. The average daily consumption of water in a U.S. household.
b. The weight of football players in the NFL.
c. The number of three-point shots completed in a college basketball game.
d. The time required to drive from Dallas to Denver.
e. The average daily temperature in the world.
C
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Consider the bond market to be in equilibrium according to our complete theory of the term structure of interest rates. The current interest rate on one-year bonds is 2 percent, and you believe, as does everyone in the market, that in one year the interest rate on one-year bonds will be 3 percent, and in two years, the interest rate on one-year bonds will be 4 percent. That is, using our standard notation,
= 2%, 
= 3%, and 
= 4%.Assume that there is no term premium on a one-year bond.
a.According to the expectations theory of the term structure of interest rates, what will the interest rate be today on a two-year bond and a three-year bond??
Suppose the term premium equals 0.75 percent × the number of years to maturity, for the 2-year bond and the 3-year bond.
?
b.Calculate the interest rate today on the two-year bond and the three-year bond, incorporating the term premium. c.Draw the yield curve for today, using the values you calculated in part b. Your drawing should show three points and should be drawn reasonably to scale, showing the values on each axis of each point plotted. Explain briefly (in one or two sentences) why the yield curve has the shape it does.
What will be an ideal response?
Users rely on the auditors' independent assessment of financial statement presentation because few users have direct knowledge of the company's operations
a. True b. False Indicate whether the statement is true or false
When the market rate of interest was 11%, Valley Corporation issued $100,000, 8%, 10-year bonds that pay interest semiannually. Using the straight-line method, the amount of discount or premium to be amortized each interest period would be
A) $4,000 B) $896 C) $17,926 D) $1,793
Briefly distinguish between managerial accounting and financial accounting. Be sure to comment on the general focus, users, and regulation related to the two fields.
What will be an ideal response?